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https://finance.yahoo.com/news/bond-yields-sending-scary-signal-100003918.html...yields on 30-year government bonds started to decline on Jan. 2, anticipating the fallout from the budding coronavirus crisis that had taken hold in China. Yields fell from 2.34% on that day to 0.94% on March 9, as the price of the benchmark 30-year bond leaped 29%. Only on Feb. 19—seven weeks later—did the S&P 500 Index begin its 35% slide. Fast forward and 30-year yields have fallen from 1.66% on June 8 to a recent 1.19% as their prices climbed 9%. The question is whether stocks will follow again, and with a similar lag of about seven weeks. The fundamental economic scene favors a repeat.
Recall the craze for Socks the Puppet and his dot-com buddies in the late 1990s. When that bubble broke, the Nasdaq Composite Index plunged 78%. Also recall the so-called Nifty Fifty group of stocks in the early 1970s. When the only companies of interest to investors made gimmick cameras, ran amusement parks and built motor homes, it was clear the basic economy was in trouble. What followed was the severe 1973-1975 recession and deep bear market. I believe the bond rally signals a renewed drop in stocks, with the S&P 500 down 30% to 40% from here as the great depth and length of the recession hits home.